Tuesday, February 07, 2006

They've cut their dividend in half. The dividend was the main reason I bought that stock in the first place. Of course, the point of cutting the dividend would be to use that money to get their act together and their stock price out of the toilet, so I hope they use it well!

6 comments:

GM is a dead company at the moment. I don't see the stock moving to it's higher levels ($45/55 per share) for another 2-3 years if that long.

It's better investing strategy to invest in growth stocks, companies that grow at greater than 20% a year. It's far riskier but better rewards. It's all about how much risk one is willing to taking when investing in the markets.

good lesson- high dividends don't necessarily mean a solid investment. and investing in growth stocks, purely based on growth projections or past history is a bad idea. you need to do some homework on the long term sustainability of that growth, and understand if there's a real driver behind it.

I don't really remember my entire thought process on why this seemed like a good idea at the time. I don't think I thought it would be a growth stock but I thought it would hold its value and keep paying a good dividend. I would love to go back and look at the numbers from July 04 and see what red flag I missed, and why it didn't bother me that it was already on a downward trend.

don't beat yourself up too much. if it's any consolation- there are lots of people out there that did the same as you did. i hold gm bonds which pay off at the end of this year- i'm holding my breath....it's a good lesson for all of us. there's no substitute for homework when it comes to investing. the signs on gm were clearly out there for us.

The question you should consider is why you are still holding the stock. It doesn't matter what you paid for it, or what you were thinking when you first bought it. You just need to ask "is this the best place I could have this money invested right now?" and act accordingly. It is hard to imagine that GM is your best option.

About Me

My name is Madame X, and I am a 40-something single woman living in New York's lower Hudson Valley. I write about how much money I make, what I spend it on, how much I save, how I budget, my home-buying experiences, my financial goals and ambitions, my thoughts on class and what it means to be rich or poor, and anything else that relates to money. (More about me here, here, and here.)If you take any of my advice, do so at your own risk as I am not really qualified to give it. If you have advice to share, please do, and many thanks!